The Institute of Chartered Accountants of India (ICAI) has held that furnishing false audit reports without proper verification amounts to professional misconduct and reprimanded the Chartered Accountants (CA) along with a fine.
It was alleged that the Respondent as the tax auditor of the auditee was required to give a true and Correct report on the financial position of the company and ought to be more careful while auditing the cash and bank balances which are easily susceptible to manipulation and not merely rely upon the inclusion of the same in the books of accounts of the assesse based on the previous audit report.
As per the copy of the Assessment Order dated 07th March 2016, there were unexplained cash deposits of Rs. 1,13,23,000/- which were added back to the total income of the assessee.
The Committee observed that as regards disclosure of alleged bank accounts in the financial statements is concerned, the Respondent relied on the audit report of the previous auditor.
The Committee noted that as per the Assessment Order dated 7! h March 2016, there were unexplained cash deposits of Rs. 1,13,23,000/- which were added back to the total income of the assessee.
The Coram comprising CA. (Dr.) Debashis Mitra, Mrs Rani Nair, Shri Arun Kumar, CA. Rajendra Kumar P, Member and CA. Cotha S Srinivas ordered that the Respondent CA. Prashant Purushottam Khavte (M.No.042935), be reprimanded along with a fine of Rs.25,000/- (Rupees Twenty Five Thousand Only).
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